A Thai citizen friend of mine is buying a house. He has a 'normal job' and also an online business with a 3 year history of consistent sales. When applying for a loan, SCB told him that the income from his normal job (40,000month) would be calculated as 40,000 Baht. The income from his online business in which he consistently makes 100,000 Baht a month will considered ust 20,000 Baht because 'the money is made on the internet'.

I have never heard of this. Money is money and income is income. As long as it is legal and especially if there is a long history of sucess, why on Earth would you dismiss 80% of a potential customer's income? Is this the norm in Thailand? (I don't have experience, but I would be shocked if online income in the US was dismissed as inferior and worth only 20% of income earned working for an employer). Are there any banks in Thailand that view income as income as long as it is legal and documented?

Rather odd?

A lot of banks work this way.

For instance the bank I used to work for, when considering thinks like online income which would normally be self employed income, an applicant needs to have 3 years accounts and paid tax for the income for that income to even be considered (there are times when 2 years or even 1 year would be accepted, but only in the case of a very good credit score and it would have to go to underwriting for approval).

Even then only an average is taken over the 3 years, and in the case where income is showing a downward trend only 60% is used.

This is because some income cannot be shown as sustained, and therefore the bank has to look at this as a potential risk overstretching the clients ability to repay, and also they have to make sure they are being fair to the client so they are not put in a position where they cannot afford repayments.

This is my guess as to what is happening here, what they will accept seems quite harsh, but they are obviously trying to limit the risk to themselves

totster

When your Thai friend asked the bank the same question, what was the bank's response?

SCB sucks for loans, next they will tell him the only loan they can give is 3 years and 21% interest.